How to avoid the current poor exchange rates when buying in Spain.

Whilst many bargains exist in Spain low exchange rates are negating some of these benefits.

Many cash buyers are torn between accessing property at low purchase prices versus the real cost given current Sterling to Euro rates.

Whilst setting up a Spanish euro mortgage to overcome this is one solution many buyers are put off by the costs of setting up a mortgage for what is expected to be a short to medium timescale. Spanish mortgage costs for those clients who know the requirement is only temporary can be prohibitive.

There is now a product available that allows cash buyers in Spain to maintain their funds on deposit in sterling and against the security of funds obtain a credit line in Euros that can be used to complete the purchase. Because a credit line rather than a Spanish mortgage is set up, costs like mortgage deed tax, and valuation fee are avoided.

The deposited funds can be placed in a range of guaranteed capital accounts dependant on clients preference. With the right selection of deposit or bond account, the interest rate difference between the rate charged on the credit line and the rate paid on the deposited funds can be as low as 2% which is in line or below current mortgage rates.

Cash held in sterling by the bank must exceed the credit line facility level to cover risk of further exchange fluctuations but with an insurance policy taken by client the bank can provide up to 90% of the sterling equivalent in Euros.

For clients who are not pure cash buyers and require up to a 50% mortgage the bank can satisfy both requirements. Provide up to 50% on a mortgage using property as security and provide a cash line against the deposit monies for the rest of the funds required for completion. This means even for buyers who are not complete cash buyers the ability to not change up sterling to Euros in current financial environment can be 100% avoided.